Oracle-manipulation-proof borrow cap

Evidence summary #

No protocol-level borrow caps per asset. Supply and borrow are limited by market liquidity and the Adaptive Curve IRM dynamics only. Oracle manipulation risk is per-market and was demonstrated in PAXG/USDC Oct 2024. Chainlink-based oracles available but not mandatory — any oracle can be used.

Detail #

Morpho Blue has no explicit per-asset borrow cap in the core protocol. Unlike Aave (which has governance-set borrow caps per asset), Morpho Blue markets have no cap on borrowing beyond available supply liquidity. The Adaptive Curve IRM adjusts rates as utilization rises but does not impose a hard cap. Any oracle can be used at market creation — there is no requirement to use a manipulation-resistant oracle. The PAXG/USDC exploit (Oct 2024) demonstrated that an oracle with a misconfigured SCALE_FACTOR could allow effectively unlimited borrowing against inflated collateral until market supply is drained. MetaMorpho Vault V2 introduces curator-level caps (absolute and relative) for vaults, but these are not core protocol controls. Template: yellow = oracle-manipulation-resistant feeds (Chainlink) used but no formal borrow cap; red = DEX-TWAP oracle with no borrow cap. Yellow applies (Chainlink available and used for major markets, but not mandatory and no borrow cap).

Sources #

Methodology #

Determine whether the per-asset borrow cap is ≤ (oracle pool depth × manipulation-resistance multiplier).

See the full factor methodology and distribution across all protocols →